Help with Monitor Profiles

Can I trouble somebody to help me out with some beginner questions on color management? I have some nice, new hardware here and need a quick primer on how to use it properly.

First, I'm using an Eye-One Display 2 colorimeter to calibrate a new HP LP2475w IPS monitor. In i1's options, should I use ICC specification 2 or ICC specification 4? And should I use monitor profile size Small (Matrix) or Large (LUT)?

Then, to load the calibrated monitor profile into Photoshop CS3, should I choose "Monitor Color" or "Custom" settings from the dropdown box in the color setings menu?

Now in Photoshop when I open a file with an embedded sRGB color profile, it prompts me to: 1.) use the embedded profile, 2.) convert to the working space, or 3.) discard the embedded profile. I convert, right?

Finally, when I save the edited file, do I leave the check mark in the box for the ICC Profile that matches my monitor? I assume that means there will no longer be an sRGB profile embedded into the new file, right? How will that affect the outcome if I take those files into a photofinishing shop for printing?